Money sent home by Kenyans in the diaspora is expected to drop considerably in 2020 due to the global outbreak of Covid-19.
The World Bank projects a global decline in remittances by about 20 percent citing the economic crisis caused by the pandemic, which continues to wreak havoc across the world.
This would be the biggest fall in recent history largely due to a decline in the wages and employment of migrant workers, who are more vulnerable to loss of employment during an economic crisis.
“Remittances to low and middle-income countries (LMICs) are projected to fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households,” says World Bank in a report.
Remittances from the diaspora have remained Kenya’s leading source of foreign exchange since 2015, ahead of earnings from tourism, tea, coffee and horticulture exports.
In Africa, Kenya is the fourth-largest recipient of diaspora remittances behind Egypt, Nigeria, and Ghana.
Last year, Kenyans abroad sent home $2.7 billion (Sh280 billion)—a new annual record—according to the Central Bank of Kenya (CBK).
This represented a 3.7 percent growth from the previous year when diaspora remittances stood at $2.6 billion (Sh272.3 billion).
The US and Europe, where the largest share of Kenya’s diaspora remittances come from, have been hit hard by the Covid-19 pandemic. The US has the highest number of Covid-19 infections and fatalities in the world with over 962,000 cases and 54,300 deaths as of Sunday, April 26th.
North America accounts for about 47 percent of total Kenya diaspora inflows, followed by Europe (24 percent) and the rest of the world (29 percent).